Guides 10 Strategies for Landlords In A Challenging Buy-To-Let Market

Buy-to-let investors are facing significant challenges in 2025 as landlords grapple with rising interest rates, increased taxes, and tightening regulations. According to UK Finance, the value of buy-to-let mortgages shrank last year for the first time, signalling a tough environment for property investors.

Furthermore, the impending introduction of a new Labour government and the imminent abolition of Section 21 “no-fault” evictions, which currently allow landlords to regain vacant possession of their properties, is causing additional concern. Without Section 21, selling a property at full market value may become more difficult, leaving landlords searching for viable alternatives.

So, in the face of these shifting dynamics, what options do landlords have? Drawing on my experience and conversations with landlords at my seminars, I’ve compiled 10 strategies that can help you navigate this challenging environment.

Maximise Your Property’s Income Potential

Explore ways to enhance your rental income by considering alternative uses for your property. Depending on its location and type, converting it into a holiday let or serviced accommodation might be more lucrative than traditional rentals. However, be mindful of the associated costs, including specialized management, higher furnishing standards, and maintenance demands.

Lease to Local Authorities or Large Organisations

Consider leasing your property to local authorities or large companies like Serco, which manage housing on behalf of the government. This can provide a guaranteed long-term income without the typical management responsibilities or repair costs, making it a stable, hands-off investment.

Invest In Renovation Projects

For those interested in dipping their toes into property development, renovating houses or flats in need of work can be an excellent strategy. This approach is a gateway into more complex projects while still offering potential for profitable returns, whether you choose to sell or rent out the renovated property.

Permitted Development (PD) Rights

Permitted Development Rights, introduced in the mid-2010s, have made it easier to convert offices and shops into residential properties with streamlined planning permission. This strategy can be more straightforward and cost-effective than traditional residential conversions, making it a popular choice for landlords seeking higher returns with less red tape.

Explore Residential Conversions

While more complex, residential conversions, especially those involving listed buildings, can be highly rewarding. These projects may be pricier and involve more detailed planning, but the competition is often lower, leading to potentially higher profits. With my 43 years of experience, I’ve seen first hand how this strategy can be very successful.

Consider Mixed-Use Investments

Mixed-use properties, such as those combining a commercial shop with residential units above, offer a balanced investment opportunity. Lenders often favour these properties due to the diversified income streams, which reduce risk if one tenant type struggles. This option can be particularly attractive if you prefer less involvement in managing tradespeople and conversions.

Invest In Commercial

Commercial property investment requires more capital, as lenders typically offer a 50% loan-to-value ratio, but the potential returns are often higher than in the residential market. If you can purchase a partially let commercial property and secure full occupancy, the income potential can be substantial.

Develop New Build

The demand for new-build housing remains strong, and one of the advantages is that you can accurately estimate construction costs. Many investors are now venturing into this area, attracted by the scalability and predictability of building homes for sale or rent.

Land Promotion

Land promotion involves partnering with landowners to secure planning permission, with profits shared between the promoter and the landowner. Alternatively, buying land without planning permission and working with consultants to obtain it can be even more profitable, albeit with higher risks.

Look Out For Opportunity at Auction

Auctions are a reliable indicator of the broader property market and often present opportunities to purchase properties below market value. Whether you plan to renovate, resell, or simply hold, auctions can be a great way to identify bargains and stay ahead of market trends.

I hope you find these strategies helpful as you navigate the evolving property market, but if you have any questions, take a look at my property consultancy services, seminars, or helpful property books.